Private label trends in Europe
Matthias Queck
Discount Analyst, Planet Retail
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Private Label Trends in Europe
Albert Heijn, Netherlands
Müller, Germany
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Overview – Private Label Trends
Where Private Labels Are Growing
Why Private Labels Are Growing
Future Challenges
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Where Private Labels Are Growing
Europe has the highest PL penetration and the highest growth rate worldwide
North America
16%
Europe
23%
(+0.7%)
Asia Pacific
4%
Latin America
2%
Source: ACNielsen, Sept. 2005
Emerging
Markets
6%
Global
17%
(+0.4%)
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Where Private Labels Are Growing
PL Share of Sales in Major European Markets (%), 2005
45
40
35
30
41.0
25
39.9
35.1
20
29.4
29.3
28.9
15
23.2
19.9
10
10.9
5
0
la
er
z
t
i
Sw
nd
UK
rm
Ge
y
an
n
ai
Sp
th
Ne
lan
er
ds
a
Fr
e
nc
m
iu
g
l
Be
ria
st
u
A
Ita
ly
Source: GfK/Europanel
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Where Private Labels Are Growing
100
95
95
2003
2004
90
Private Label Share of Retailers’ Sales (%)
80
70
63
63
60
50
45
42
40
40
35
30
30
25
32
25
23
25
24
21
22
23
20
12 13
10 10
10
0
Aldi
Schwarz
Tesco
Casino
ITM
Carrefour
Rewe
Auchan
Ahold
Metro
Group
Edeka
Private label share of Europe‘s leading grocers (%), 2004 vs. 2003, estimated
Source: Planet Retail
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Where Private Labels Are Growing
Shares by product area (%)
Globally 2004, based on value sales
Manufacturer Brands
68
69
(-3)
(-1)
75
(-1)
95
(-0.1)
32
31
Paper, Plastic,
Wraps
98
(-0.2)
2
2
Cosmetics
Baby Food
25
5
Retailer Brands
Refrigerated
Food
98
(-0.4)
Frozen Food
Personal Care
Source: ACNielsen, Planet Retail
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Private Label Trends in Europe
Full-Range Retailers
Discount Retailers
Pushing PL shares by
Pushing PL shares by
launching new lines:
premium
special interest
● Extending lines
● Launching new lines:
special interest
premium
● Revamping lines
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Private Label Trends in Europe
Rewe Group, Germany
Migros, Switzerland
Boots, UK
Colruyt, Belgium
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Private Label Trends in Europe
Discount Retailers
Aldi, UK
Plus, Germany
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Private Label Trends in Europe
Full-Range Retailers
Discount Retailers
Pushing PL shares by
Pushing PL shares by
launching premium and
special interest lines
- Extending lines
- Revamping lines
- Launching new lines
(special interest, premium)
- reducing floor space for
branded products
Pushing brand shares by
listing more branded top
products
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Private Label Trends in Europe
Discount Retailers
Lidl, Scandinavia
Lidl, UK
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Why Private Labels Are Growing
Why Private Labels Are Growing
As always, it’s all about Power and Profit
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Why Private Labels Are Growing
Shift in balance of power – factors driving PL growth
CONSUMERS
Well informed and
accustomed to PL
RETAIL ENVIRONMENT
Concentrated market with
fierce competition
RETAILER
RETAIL BRANDING
MANUFACTURERS
Overcapacities and dependence
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Why Private Labels Are Growing
Price Differential Private Labels Versus Brands
Average price of PL product compared with leading brand
Brand = 100%
74%
73% 74%
N
D
B
R
A
ds
er
la
n
ly
It
a
N
et
h
S
w
it
ze
rl
an
d
or
w
ay
U
K
nc
e
60%
N
u
H
Fr
a
ng
ar
pa
in
S
y
m
an
G
er
G
re
ec
e
52%
y
57%
54% 56%
64% 66%
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Future Private Label Challenges
Future Private Label Challenges
Accelerated growth in new categories
Blurring dividing lines
- Increasingly professional PL marketing
- More manufacturing know-how
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Future Private Label Challenges
Accelerated growth in new categories
New economy
private label range
for cosmetics,
offered in Norma
discount stores
in Austria
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Future Private Label Challenges
Blurring dividing lines
Private Label, or Manufacturer‘s Brand?
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Future Private Label Challenges
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Benchmark Private Label:
Tesco Finest (left) and Coop Fine Food (right)
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Future Private Label Challenges
Future Private Label Challenges
Accelerated growth in new categories
Blurring dividing lines
- Increasing professional PL marketing
- Better manufacturing know-how
Co-operations
- Between PL suppliers and retailers
- between brand suppliers and retailers
Suppliers becoming service providers
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Future Private Label Challenges
Co-operations
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French brand manufacturer Fromagerie Bel sells its
Babybel cheese with the Aldi label "Be light" on it.
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Future Private Label Challenges
Co-operation ...
... or confrontation!
“
Asda marketing and brand director Richard
Hodgson described it as his job to 'undo'
the marketing of brands sold in Asda stores
and to drive consumers to the retailer’s
private label offering instead.
“
Planet Retail News, 11 May 2006
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Future Private Label Challenges
Co-operation ...
... or confrontation!
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ASDA Essentials, UK
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Summary
Where Private Labels Are Growing
Europe: highest penetration and growth rate
Growth seen in strong and weak PL categories
some discounters are extending the brand ranges
Why Private Labels Are Growing
Shift in balance of power: Control over supply chain
Retail branding
Higher margin contribution
Future PL Challenges
Blurring dividing lines
Co-operation or confrontation
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Summary
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Our comprehensive report
Private Label Trends Worldwide, 2006
is available from
www.planetretail.net